I am about to buy a 20G iPOD for the very use of running - and having a lot of CD's etc in my hand! From my research there is a 25 minute solid state buffer that the hard disk copies the music to. Playback is from the solid state memory which does not skip etc...my guess is that this preserves battery life with music being copied to the solid state in chunks rather than real time (that's only my opinion).

I have spoken to a chap with an iPOD and he has never had any issues with using it for sport. Also the Apple website and all the other current iPOD sales sites all tout it's use in a robust manner, gym, cycling, running etc....

Personally i can't wait for it to arrive and should be ordering within the next couple of days.